Do You Know About HELOC? Trivia Questions! Quiz

1.

The structure of a Peoples HELOC is which of the following?

A.

10 year interest only draw period
B.

5 year interest only draw period followed by a 10 year amortization with principal and interest payments
C.

7 year interest only draw period
D.

15 year amortizing loan

Correct Answer
A. 10 year interest only draw period

Explanation
The structure of a Peoples HELOC is a 10 year interest only draw period. This means that for the first 10 years, the borrower is only required to make interest payments on the loan. After the draw period ends, the borrower will then need to start making principal and interest payments.

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2.

The way a borrower can draw on a HELOC is:

A.

Online transfer from HELOC to a Peoples checking account
B.

Checks can be ordered to pull from the heloc directly
C.

Checks can be ordered or debit card from the Peoples checking account the funds can be transferred into via online banking
D.

A & B
E.

A & B & C

Correct Answer
E. A & B & C

Explanation
A borrower can draw on a HELOC by performing an online transfer from the HELOC to a Peoples checking account, ordering checks to pull from the HELOC directly, or ordering checks or using a debit card from the Peoples checking account that the funds can be transferred into via online banking.

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3.

True or False: A borrower can have a HELOC on an investment property?

A.

True
B.

False

Correct Answer
B. False

Explanation
A borrower cannot have a HELOC (Home Equity Line of Credit) on an investment property. HELOCs are typically only available for primary residences and not for properties that are used for investment purposes.

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4.

True or False: Pricing needs to be locked with secondary after filling out the mortgage rate calculator?

A.

True
B.

False

Correct Answer
A. True

Explanation
The correct answer is True. This means that after filling out the mortgage rate calculator, the pricing needs to be locked with secondary. This suggests that once the mortgage rate is calculated, it is important to secure or lock in that pricing with a secondary entity or institution. This helps to ensure that the agreed-upon rate remains unchanged and protects the borrower from potential fluctuations in interest rates.

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5.

On a simultaneous HELOC which scenario is correct?

A.

The mortgage loan officer has to call someone in the bank to approve the heloc separate from the 1st.
B.

The mortgage loan officer can put the HELOC into Encompass along with the first and the mortgage underwriter will approve along with the 2nd
C.

The mortgage underwriter will approve along with the 2nd in Encompass, however if the loan amount of the 2nd is $250,000 or greater the underwriter will also have to get loan committee approval
D.

A & C
E.

B & C

Correct Answer
E. B & C

Explanation
The correct answer is B & C. In scenario B, the mortgage loan officer can put the HELOC into Encompass along with the first and the mortgage underwriter will approve along with the 2nd. In scenario C, the mortgage underwriter will approve along with the 2nd in Encompass. However, if the loan amount of the 2nd is $250,000 or greater, the underwriter will also have to get loan committee approval.

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6.

Does Peoples allow HELOC’s on out of state loans?

A.

Yes
B.

No

Correct Answer
B. No

Explanation
Peoples does not allow HELOC's on out of state loans.

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7.

If the borrower chooses the rate reduction by setting up an AFT which of the following is TRUE?

A.

AFT (automatic funds transfer) must be set up with a Peoples account so that monthly the payment will pull from the Peoples account and pay the loan payment
B.

Funds must be deposited into the Peoples account at closing
C.

Borrower can use that account as a checking account with checks and debit cards, however enough money must be in the account at the 21st of the month to automatically pay the loan payment
D.

If the borrower closes the checking account or doesn’t have enough funds in the account the borrower will be past due and reported to the credit bureau and the interest rate will go up
E.

All of the above

Correct Answer
E. All of the above

Explanation
If the borrower chooses the rate reduction by setting up an AFT, all of the statements mentioned in the options are true. The AFT must be set up with a Peoples account so that the loan payment can be automatically pulled from the account every month. Funds must be deposited into the Peoples account at closing. The borrower can use the account as a checking account with checks and debit cards, but it is necessary to have enough money in the account by the 21st of the month to automatically pay the loan payment. If the borrower closes the checking account or does not have enough funds, they will be past due and reported to the credit bureau, and the interest rate will increase.

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8.

If you have a “no cost loan” which of the following applies?

A.

Origination and doc prep fees are waived, however 3rd party closing costs such as (title, appraisal, credit bureau, data verify, etc.) are still the responsibility of the borrower
B.

There are no costs whatsoever and it’s a completely free loan to the borrower
C.

Borrower pays origination and doc prep fees but NOT 3rd party costs
D.

None of the above

Correct Answer
A. Origination and doc prep fees are waived, however 3rd party closing costs such as (title, appraisal, credit bureau, data verify, etc.) are still the responsibility of the borrower

Explanation
If a loan is described as a "no cost loan," it means that the borrower is not required to pay origination and document preparation fees. However, the borrower is still responsible for paying third-party closing costs such as title fees, appraisal fees, credit bureau fees, and data verification fees. In other words, while there are no upfront costs for the borrower in terms of origination and document preparation, there are still additional fees that need to be paid during the closing process.

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9.

True or False: $100 annual fee can be waived if AFT is set up from Peoples Bank deposit account?

A.

True
B.

False

Correct Answer
A. True

Explanation
The statement suggests that if an Automatic Funds Transfer (AFT) is set up from a deposit account at Peoples Bank, the $100 annual fee can be waived. This means that by establishing this automated transfer, customers can avoid the fee and save money. Therefore, the correct answer is True.

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10.

Who prepares the closing for a HELOC?

A.

Branch Operations
B.

Branch Managers
C.

Bank Loan Administration works in conjunction with mortgage closing department for a simultaneous HELOC closing
D.

IAccounting

Correct Answer
C. Bank Loan Administration works in conjunction with mortgage closing department for a simultaneous HELOC closing

Explanation
Bank Loan Administration works in conjunction with the mortgage closing department for a simultaneous HELOC closing. This means that both departments collaborate to prepare the closing documents and complete the process for a home equity line of credit (HELOC) simultaneously. This ensures efficiency and accuracy in the closing process, as both departments work together to handle the necessary paperwork and procedures involved in finalizing the HELOC.

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